Online investing has had a fast evolution. It started to become popularized in 1995 and, boy, was there progress. In the earliest days, only about one trade a day was done online. Trading was confined to UK equities at the market price, with no limit orders to enable deals within specified prices. The first customers placed orders by e-mail, which has been replaced by an automated process.
There was a standard 30-minute delay in share prices shown on screen, which put private investors at a major disadvantage to the pros. They were willing to pay to upgrade to a 15-minute delay. Today there are free real-time prices.
In the mid-1990s and up to a few years later, the online dealers tended to have a tiered charging structure, where the costs of a trade decreased with its size. This has largely been replaced by a flat fee structure, often with a reduction for frequent traders.
By early April 2005, there were as many as 635,000 private investors with online dealing accounts. In recent years, the range of securities traded has expanded. Some of the larger brokers now trade derivatives, foreign exchange and bonds, and offer ISAs, self-invested personal pensions (SIPPs) and investment funds.
Online share trading services have started breaking into profit. They are now more reliable and better serviced, and the facilities are better value for money. The online stockbrokers’ websites have become so user-friendly that a child could put them to full use. Using the best sites, you not only can buy and sell shares, obtain real-time quotes and track your portfolio, but you also have access to analysis and financial news flow. You may apply stock selection filters.
Some online services are available via WAP (wireless application protocol) on mobile phones and handheld devices. As yet, the services are limited, but the potential is vast. You can now use the search engine Google on your mobile to access WAP content.
One downside of online stock market investing is that real human contact is often missing. If you are the type of person who needs your hand held while making your investment decisions, or needs somebody else to make them for you, you will prefer telephone or face-to-face contact. The internet is not enough, but it will still be very useful.
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